Good Morning from beautiful Hamburg and welcome to the first Daily FX Report of the week. We hope you enjoyed your weekend and start relaxed into an interesting week with several important economic figures among the U.S. leading indicators and the U.K. GDP.
Market review
Today the JPY fell against a basket of major currencies on concern that U.S. companies this week may post stronger second-quarter earnings than expected, added by signs that the global recession is easing which boost investors risk appetite and the demand for higher-yielding assets. The EUR/USD rose near to a two-week high at 1.4178 as the CIT Group Inc. considers an offer from some of its largest bondholders to provide $3bln in bridge financing, damping the appeal of the USD as a refuge from the credit crises. Also the GBP gained versus the USD in the early Tokyo trading hours after a U.K. report showed today that the average cost of a home strengthened by 0.6 % after falling 0.4 % in June. The GBP/USD rose from 1.6323 to 1.6412 at its highest level. Ernst & Young LLC’s Item Club increased its forecast for the U.K. GDP in 2010 to show expansion. The home resale in the U.S. rose in June as well and enforced the hope that the recession may soon be over. Australia’s producer price index declined 0.8 % from the first quarter, the biggest loss since the data was first recorded in 1998. The AUD/USD climbed 0.73 % and the NZD/USD 0.76 % notwithstanding the services industry index contracted for the 15th month in a row and fell to 45 points a report showed today.
GBP/JPY
Already with the beginning of June a S-H-S formation had built and heralded a trend reversal. In order of this, the currency pair broke through its support at 155.00 and fell close to a bearish trend-line to its next support at 146.80. At this level the MA Oscillator surged and boost the bulls into the market and the GBP/JPY rose to the 155.00 level again. Now it remains to see, if the old support could be crossed or it recovers again.
EUR/GBP
After the EUR/GBP has been trading in a bearish trend-channel until the middle of June a cross of the upper channel line indicated a trend-reversal. Since that time the currency pair has been trading in a bullish trend-channel and opened this week above its pivot point. Although the DMI indicator shows that the upward trend may slow down. It remains to see if the pivot point would be strong enough to support the trend.
